An emergency fund is the foundation of financial security. But whether you’re an I-Banker or starving artist, it’s never easy to sacrifice daily expenses now to build that emergency fund for later.
We all want to save that extra cash each month, and unless you want to move back in with mom and dad, you’re going to have to find ways to cut corners in your finances to put a little away every month…or even every week (it really adds up).
Now, the Web is brimming with frugal tips to help you save money on everything from toilet paper to laundry detergent, but some of us don’t want to go to the extremes. (Some people find separating 2-ply TP worthwhile, others never will).That said, there are some steps everybody should take to find savings in their weekly budgets. These three little things don’t require superhuman sacrifice and can add up to significant savings.
Plan Your Meals
Shop smart. It is easy to overspend when you’re at the grocery store. There’s a lot of food in there, and we all like food! Make a list before you go. Plan each meal for the week (or at least for lunch and dinner) on one side of the paper, and list the ingredients that you will need on the other side. Take a look through your cupboards before you shop, and make sure you’re not buying in duplicate. At the store, be sure to look at the unit price of the item rather than the total price. The unit price indicates which product is actually less expensive per unit (per gallon, per ounce, etc.) and will help to reduce your overall grocery bill.
On the other hand, if there is something you know you use a lot of on sale in bulk (like maybe toilet paper or your favorite shampoo) buy it! Buying in bulk can save money in the long run. Again, be sure to look at the unit pricing and don’t be fooled by the sale sign. Retailers sometimes put up the unit price on an item when there is a “sale,” counting on the careless shopper to believe the sign without looking into the details. You were not born yesterday!
Brown Bag It
If you don’t have to eat with a client or boss every day, you should be bringing lunch to work with you. You don’t have to eat in the office or at your desk. Go to the park, or eat in the canteen.
Most grocery bills are reflective of $8-10 dollars per day per person for all three meals. Depending on where you live and where you eat, you could spend anywhere from $10 to $25 dollars on lunch per day when eating out. It really adds up overtime. Buying lunch is convenient, but it will certainly put a damper on your ability to save.
Make a Simple Weekly Budget
If an emergency fund is the foundation of financial security, a budget is the cement. Still, a lot of people have a tough time getting into the habit of regular budgeting. You probably have a rough idea of your monthly budget—your rent, student loan bills, utilities, and how much money you have left over.
But such a “big picture” often gets lost in the day-to-day. A weekly budget can help.
Take the money you have left over after paying your monthly expenses and divide it over the weeks in the month.
Remember when mom and dad used to give you an allowance? It’s like that. Simply give yourself a weekly allowance, and stick to it! Take out weekly spending money in cash, and don’t go over budget.
You’ll know exactly what you’ve spent and won’t be unpleasantly surprised when you look at your bank account balance!
What About You?
Have you been successful saving more by making a simple but significant change to your everyday expenses? What works for you?